1. The Federal R&D Budget: Process and Perspectives Matt Hourihan April 11, 2013 for IAFF 2190W, Science, Technology, & Policy George Washington University AAAS R&D Budget and Policy Program http://www.aaas.org/spp/rd

2. U.S. R&D INVESTMENT

5. Two Spending Categories: Discretionary vs. Mandatory Mandatory Spending (aka Direct Spending) Mostly entitlements Potential for high political sensitivity = third rail Changed only by act of Congress: essentially on autopilot Discretionary Spending: Adjusted annually Easy targets? i.e. Sequestration Vast majority of federal R&D is discretionary

6. U.S. R&D INVESTMENT The Federal R&D Budget: The Basics About $130 billion in FY 2013 Down ~17% since 2010 About half = DOD Basic + applied research = nearly half Fragmented More than two dozen departments and agencies But top heavy (DOD and NIH) Funds ~60% of university R&D Declining share of economy Declining share of national R&D investment (vs. industry)

7. U.S. R&D INVESTMENT

8. Recent R&D Budget History Historically large cuts this year Recent gains: Energy General Science Manufacturing Recent stagnation / declines Health Agriculture Environment Space

9. U.S. R&D INVESTMENT Q: How Did We Get Here? A: A convoluted, complicated, old and evolving process…

10. U.S. R&D INVESTMENT The Federal Budget Cycle Internal agency discussions Joint guidance memorandum from OMB / OSTP Defines focus areas, methods, strategy for boosts or cuts Agencies deliver budget justifications to OMB

11. U.S. R&D INVESTMENT What Drives Presidential R&D Budget Formulation? Incrementalism Administration priorities Program priorities & politics Expert and community input OMB oversight, OSTP input Also big (fiscal) picture

12. U.S. R&D INVESTMENT The Federal Budget Cycle Agencies negotiate with OMB (passbacks) Budget proposals are finalized in January President presents the proposed budget to Congress early February

13. U.S. R&D INVESTMENT

15. The Federal Budget Cycle Congress holds budget hearings… IN THEORY - Approves budget resolution (simple majority) 302(b) allocations to the 12 appropriations subcommittees

16. U.S. R&D INVESTMENT

17. The Federal Budget Cycle Approps committees write/approve 12 appropriations bills Bills have to pass both chambers (can be filibustered); Differences are conferenced Continuing resolutions? Omnibus? Reconciliation? Supplemental appropriations?

18. U.S. R&D INVESTMENT Congress House Budget Cmte Natural Resources Cmte Approps Cmte Subc on Interior + Env Subc on Energy + Water Energy + Commerce Cmte Senate Budget Cmte Energy and Nat Res Cmte Env and Pub Works Cmte Approps Cmte Subc on Energy + Water Subc on Interior + Env

19. U.S. R&D INVESTMENT Authorizations vs. Appropriations Authorization Creates and modifies programs. Includes funding ceilings BUT NOT actual funding. Under the jurisdiction of the topical legislative committees. i.e. America COMPETES and ARPA-E Appropriations Permits funding (specifically, incur obligations) Under the jurisdiction of the Appropriations Committees (each with 12 subcommittees – one for each spending bill) Defense, Energy + Water, Interior, Labor/HHS/Eduction, Agriculture, etc…

20. U.S. R&D INVESTMENT What Drives Congressional Budget Decisions? Incrementalism Local politics Effectiveness, balance, duplication Role of government Workforce Topical vs. substantial The Big Fiscal Context Annual Miracle

21. U.S. R&D INVESTMENT The Federal Budget Cycle Agencies are working on 3 budgets at any given time. Right now: Spending FY 13 Congress dealing with FY14 Agencies starting to kick off planning for FY15

22. U.S. R&D INVESTMENT The Budget Control Act / Sequestration 1.Established Discretionary Spending Caps 2.Established automatic budget enforcement procedures (sequestration) $1.2 trillion cuts through 2021 ~8% cuts to R&D over the next five years

23. U.S. R&D INVESTMENT

24. Current State of Play Presidents FY14 budget now out The BIG issues remain: deficits, taxes v. spending, growth in entitlements, tax burden Sequestration remains in place for now…. Research community reeling …also debt ceiling

25. U.S. R&D INVESTMENT For more info… mhouriha@aaas.org 202-326-6607 www.aaas.org/spp/rd/